Over the next few years, I predict that the biggest social media companies around the world will become super apps, acting as gatekeepers to a wider array of things people do online.
For brands, what’s not to like?
These new breeds of brands are kings in their respective markets. They gather enormous amounts of consumer data. They get a ‘locked-in’ customer base. They meet customers on their own digital platforms. They take the lion's share of user revenues. They have lower development costs and they save customers time and effort (though for the consumer there's little choice in that matter if they want access to a staggering number of services).
A super-app is a one-stop shop for digital life, providing various services in a single place. From social networking to managing your finances, and delivering your groceries — they do it all. WeChat and Alipay in China are the most prominent examples.
With more and more services being offered digitally, and most of us using several mobile apps to access them, bundled digital services are the next logical step for the Western digital world.
So, why haven’t Western brands converged to offer all services through a single app yet? The prize for a western economy super-app is huge - a platform that can service every aspect of the consumer experience across markets in the West. Experts think they could become the most valuable company in history.
Simple Definition: A single mobile app containing thousands of mini-apps offering services from finance to shopping, holidays to ride-hailing, messaging and divorcing. A platform designed to deliver the breadth of functionality of the internet, in a curated form, all stuffed into a smartphone.
Industry Definition: A closed ecosystem of apps that users will use daily because they offer a seamless, integrated and contextualised experience across many services.
Headline: Users in China and other Asian countries have flocked to super apps to solve technology challenges and meet social needs. WeChat is now is the operating system of the Chinese internet.
Headline: Elon Musk wants to build a super-app, perhaps called “Twitter 2.0”, “The everything app” or “X” - although his super-app plan is still super-vague.
The WeChat super-app is probably the world's most used piece of software. It integrates the features of several stand-alone apps we would recognise in the West - from Apple Pay, WhatsApp, Meta and Twitter, to Instagram, Uber, Amazon, and many ancillary services like travel and transportation.
Launched in 2011, it has annual sales of $250bill, 1.2 bill daily users, and some 2 million mini-apps that subscribers can access (that’s about as many as Google and Apple combined have in their app stores); not bad when they all sit a tap away from the app’s home screen.
Super-apps only live on mobile, because across the world, mobile is the internet. The apps are emerging in almost every market worldwide, from unconventional places, and challenging how consumers traditionally engaged with brands.
These apps are the shopping malls of the digital age, and as more traffic goes through super apps, all but the largest brands must consider whether to join in. There is no shortage of super-app-building across these developing economies. In South-East Asia Grab competes with GoTo and Tokopedia, an online marketplace and in India, Paytm for buying prepaid mobile minutes.
Super apps are ecosystems; enclosed, walled-garden, experiences that make it easy for a consumer to accomplish a huge number of different tasks.
The approach of mini-programs running inside the app makes it possible for one app to perform the service of many, with some advantages:
Speed. Mini programmes are cached on the phone, so faster to load than a traditional app.
The User experience is improved as updates aren’t required - with mini-programmes, the latest version is automatically loaded.
Integration. Mini programmes are tightly integrated together; many connection points are directly shareable in chats, with the advantages of deep links to specific subpages.
Cost. Mini programs typically cost < 50% of the development cost of an app.
Super apps took hold in Asia because consumers owned underpowered smartphones
The idea is not new in the West. Walmart touted plans to develop one. Once. PayPal and Uber have tried to build slimmer sector equivalents than WeChat. (Though apparently, their investors stopped attempts to push the boundaries further). Musk, who’s taken Twitter private, may try - and as a private company, he won’t have investors holding him back.
Somewhere there’s a starting line, and some brands are already standing on it.
The Silicon Valley model is to grow vertically and go global. The super-app model is to grow horizontally and dominate a geography.
The greatest impediment to super-apps is Apple. They guard the App Store with good reason - its fees are thought to be substantial. Apple is the closest thing America has to a true super-app.
The Information, a news website, says Microsoft has considered building its own super-app, a platform combining shopping, messaging and web search. Meta is integrating the firm’s social media platforms and WhatsApp is rolling out payments services in some countries.
Who is demanding Super Apps in the West?
No surprise here - the tech billionaires. They argue that Westerners are “grappling with provider and product choice overload and hankering for service bundling, driving up demand for super apps.” There’s some truth to this, and with more and more services being offered digitally, most of us use several mobile apps to access them, so bundled digital services seem the next logical step for the Western digital world.
Here's the question though: is the “hankering for service bundling” truly coming from consumers - or from brands worrying their narrow product lines is a barrier to growth, want to expand - and see super-apps as one way to do that?
Perhaps more importantly, the shift in how the ad-supported app economy works also drives a hunger for super apps. Social media companies that tracked users across different sites can no longer be sure their ads will lead to someone buying something elsewhere. In an attention-crowded landscape, a super app becomes more integrated into people’s lives and maintains a grip on attention, whether by feeds or an easy way to find clothes to buy.
Apple has now made that harder for third-party apps. Google is planning a similar approach and has announced the end of third-party cookies in its Chrome browser. Regulators around the world, particularly in the EU, are addition considering laws to further restrict sharing of user data between different companies.
The rise of “content fortresses”
The result will be that ad-driven platforms like Facebook will work to keep users in their apps as much as possible, especially for activities that involve money like shopping. Eric Seufert, an ads industry analyst, calls this phenomenon the rise of “content fortresses.”
Since these changes by Apple and regulators largely don’t restrict how apps collect data about their own users, first-party data becomes more valuable. If a Facebook user can make a purchase without leaving to finish it on another website, Facebook can sell that information to the advertiser paying for the ad. And advertisers pay more money when they know their ads work.
WeChat, by contrast, is instead opting to take a cut of transactions done through its app and native payments service.
The biggest risk to companies with ambitions to become a super app is the increasing scrutiny of the tech industry’s power. Regulators in the US and Europe are increasingly critical of the biggest internet platforms. Even China has started forcing WeChat and others to open up their platforms to rivals in a sign they now see them as having too much power.
For now, the biggest super apps are still in China, and they are well ahead in terms of developer activity. There are about three million mini-apps in WeChat and about 1 million in Alipay, the second most popular super app in China. Users in China and other non-western countries have flocked to super apps over the past several years, but it remains to be seen if the concept will take hold with people elsewhere who are already accustomed to downloading lots of apps for different purposes.
Cultural differences
There are some unique cultural differences that play against adoption in the West, but these differences are narrowing:
Western consumers shop less frequently, with supermarkets and hypermarkets an essential sales channel for a wide range of goods.
Western consumers are more concerned about ethics.
Western consumption power is concentrated on older consumers. Chinese GenZ'ers are < 20 per cent of the population but > 30 per cent of the buying. But in the West, this balance will also shift over time as well.
Chinese enjoy the 'discovery' of shopping, but in the West, up to now it’s been more about purchasing products needed. But western consumers are now seeking shopping journey's too, ones that they can talk about, experience, or share with friends and relatives.
The super app model in Asia took off because their un-banked populations jumped to mobile payments, and they had strict app marketplace regulations. The Google Play Store isn’t available in China, Apple's is limited in what it can include, and Huawei’s AppGallery lacks scale. To plug the gaps, apps like WeChat and Alipay allow third-party developers to integrate mini-programs for other services, as they transform into super apps.
These conditions haven’t existed in Europe and the US. Until now.
Let's sum it up
Super-apps won’t remain an Asian-only phenomenon. In the West, social media firms are playing catch-up. They’re morphing from messaging friends or browsing feeds of content to include more and more of what consumers do online. Facebook with shopping features, Instagram is no longer just about sharing photos, WhatsApp testing local business directories and banking products like loans, Twitter now letting users natively host audio rooms and newsletters and put their tweets behind a paywall, TikTok adding an in-app shopping experience.
Becoming a super app is mainly about becoming more integrated into people’s lives
Out of all the big social media firms not from China, Snapchat is perhaps the furthest along towards becoming a super app. A few years ago, it introduced mini-apps by other developers that let people do things like play games together, mediate, or book movie tickets — all without leaving the app. There are now more than two dozen mini-apps on Snapchat.
Offering multiple services in a single place and consolidating the app marketplace is coming. They may not be called super-apps, develop in the same way, or become the next generation of Western digital assets by default, but simplified access to digital services is here and is going to grow rapidly this decade. When they mature as a key component of the digital services of the future they will have a huge impact on how customers engage.
According to the State of Mobile 2021 report from App Annie, people are spending 4.2 hours a day on their phones, and companies are fighting ruthlessly for consumer attention. To stay competitive, you may need to level up your app to include as many services as possible.
After all, the more services you offer, the longer your customer will stay on your app – as long as you create a positive, frictionless user experience. A positive user experience is critical, so people click away to other apps as little as possible.
By expanding your services, you also get access to more data about your customers (like address data for food delivery), which can be used seamlessly through the different services within your app.
If creating a super-app is not on your agenda, then understand the impact of such super-apps on your business. Will they be competitors of your app services? Or do they offer integration opportunities?
Only time will tell whether super apps will replace many single-purpose apps on our phones, but it is likely. So as companies re-organise around a digital-first, app-centered model, the super app trend is an important one to watch.
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